Earnings boost lifts London mid-caps, Unilever slides


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British mid-caps rose on Thursday as positive corporate results helped allay concerns over rising COVID-19 cases, while Unilever was the top blue-chip loser after it cut its full-year margin forecasts.

The domestically focussed mid-cap index rose for the third straight session, up 1.1%, helped by upbeat quarterly results from Howden Joinery Group and IG Group.

However, losses in Unilever along with weakness in peer Reckitt Benckiser weighed on the blue-chip FTSE 100 index, which only inched 0.2% higher.

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Unilever Plc fell 4.5% and was the worst performer on the index after it cut annual operating margin forecast due to rising commodity prices, while posting higher-than-expected underlying sales growth for the second quarter.

“Unilever’s first half results followed a similar pattern to a lot of recent corporate updates. Yes they are enjoying a surge in demand but their ability to fully benefit from this surge in terms of profit is being compromised by rising costs,” said Russ Mould, investment director at AJ Bell.

Britain’s retailers could open thousands of local high-street stores over the next 12 months as people start to step out again after months of coronavirus curbs, according to research from Barclays.

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The retailers sub-index jumped 1.3%

The blue-chip FTSE 100 index has gained 8.5% so far this year, helped by government stimulus, but is nearly 11% away from its all-time high. It is still underperforming the mid-cap index, which is just 1.2% away from its record high.

Among stocks, transport firm FirstGroup jumped 4.6% after it increased its planned shareholder returns by 135 million pounds ($185.29 million) after closing the sale of its U.S. bus assets to private equity firm EQT Infrastructure.

Workspace Group Plc gained 2.2% after it said it expected strong signs of businesses in London returning to work with easing of pandemic-related restrictions.

(Reporting by Shashank Nayar in Bengaluru; Editing by Uttaresh.V and Arun Koyyur, William Maclean)